How Much Does College Cost?

The price to go to college has risen over the years. The question is: “Why?” Sure, inflation has to do with it, but what else is causing how much we pay to increase? While some people at universities may be overpaid, there are other more widespread causes as to why college tuition is rising. Colleges seek to only benefit themselves from their students’ hard work. This is done by having students attend the university, graduate and get a good paying job, then make generous donations back to their Alma Mater. Colleges have the best chance of achieving this by attracting as many students to their university as possible. Colleges are simply in a war over who has the most students because it gives them a greater chance to graduate students who will go on to have prestigious positions in life which the college can proudly say they have produced. Colleges compete to attract students by producing more that is outside of the classroom. Colleges have lost their focus on their original purpose of educating people at a higher level so that those people might be able to apply for a better job to have a better life. Colleges nowadays are more selfish by wanting to be the best with their athletic facilities and student services in order for students to come to their institution. The cost of college for students has also increased due to government funding’s inability to keep pace with the rising cost to attend an institution. The cost of college is due to the fact that colleges are seeking prestige rather than quality education of their students, and put the price on the people who are willing to pay it to go to a reputable school.

John Carey, the Chancellor of the Ohio Department of Higher Education, has written a guest column outlining the steps that the Buckeye State has taken to make college more affordable.

Ohio has increased spending on higher education by 8.5% and frozen tuition and fees at state supported schools for two years. Additional money has been appropriated to help underprivileged and under-represented students pay for tuition at community and four year colleges.

One of the biggest sources of increased debt for college students is not graduating on time. Ohio has tried to address this by devoting resources to helping students get college credit in high school and to creating guidelines for more skilled counselors to keep students on track for a four year graduation once they are in college.

Inside Higher Education published this piece about fees related to delinquent student loans:

The loan guarantor USA Funds plans to file a petition with the U.S. Supreme Court today seeking to overturn a federal appeals court ruling that barred the agency from collecting fees from a borrower who had defaulted on her student loan but started repaying it. The court’s decision was backed by the Obama administration and cheered by consumer advocates. But USA Funds believes the Supreme Court is poised to overturn an earlier ruling, in a case known as Auer v. Robbins, on which the appeals court largely based its decision in the USA Funds case.

The Federal government has released new data on American colleges in an effort to help students choose where they want to study. According to Inside Higher Education

These new data show publicly, for the first time, the share of a college’s former students who make some progress in paying down their federal loans within the first three years after leaving college. And they provide the first comprehensive look at how much students who receive federal loans and Pell Grants end up earning after they leave a specific college, both in the short term and long term.

College is thought to provide opportunities for graduates not available to those not pursuing higher education. However, the increases in the price of college and the decline in wages for those with degrees are making people question the importance of college and if it really is worth the investment.

Mary Beth Marklein argues that a college degree is still worth the investment. One point was that college graduates, whether they earn a bachelor’s degree or an associates degree, will still tend to earn more money over their lifetime versus those who do not go to college, information found based on 4 decades of analysis. And even though wages have declined for those who have earned college degrees, they have also declined for those who did not receive a college education, and the gap between the two is still at an all time high, with those people who earned college degrees earning much more money in their occupations.

Another point made was that even though student loan debt has soared by the end of 2013, a federal reserve study on data of wages for ages 16-64 for those without a degree, with an associates, and with a bachelors had shown that those with a bachelors degree have kept a return on investment of 15%, where 7% return is sound. This proves that even with student debt rising, the return on investment proves the investment is definitely worth it. Majors were also found to play a role on the returns of investment, where some majors can earn a return of 21%.

Some facts stated in the article were that over 4 decades, a bachelors degree will earn an average of about 56% more than a high school diploma and an associates will earn 21% more. However, studies have shown that the earnings of bachelors and associates degrees over high school diplomas has decreased from where they were in the years 1982-2001 to 2001-2013. Along with this statistic, the wages have declined over these same time spans. So the question is, even though those with a bachelors or associates degree do tend to make more money, is this decline in wage and earnings a permanent reversal in the demand of college graduate’s skills, or is it just a phase that will pass?

The costs of tuition and fees to attend college have been rapidly increasing for years, even decades, but this increase may be slowing according to data from recent years. This news comes as a relief to students and families who are struggling to find ways to make the investment in paying for a college education. However, even though the increase in sticker price to attend college is slowing, there is a rise in what students are actually paying when you subtract the financial aid they receive.

Although even in the most recent years tuition and fees are still going up from year to year, the rise is much smaller than in the growth in past years. Both public and private four-year institutions have seen the effects of the slow in the rise of the sticker price to attend in the past year because they have both seen the smallest one-year percentage increase of the tuition and fees in decades. However, the net prices of what students and families actually pay to attend college minus all of the forms of financial aid they receive have been increasing more and more in recent years because the growth in financial aid has not been keeping up with the increase in tuition prices.

The average net price that students and families paid was actually much lower at the height of the recession than it is now when some families are still trying to recover from the recession because there is no longer a rapid increase, but a decline in the amount of grant aid supplied by states and the federal government while tuition and fees prices are still going up each year. Some families are able to pay for a postsecondary education with no problem, but many students and families nowadays rely on subsides to pay for a college education. Although financial aid is obviously still present, it is no longer increasing by any substantial amount like it was in previous years during the recession.

Pushing for more financial aid from the states and federal government may not be the answer though, because it will only temporarily bail families out since the net prices of colleges are still likely to increase from year to year. The real problem that needs to be addressed is for college leaders and policymakers to evaluate what it really costs to supply a college education, and how to overall sticker price, therefore lowering the net price for students and families.

When it comes to the costs of higher education, one thing everyone can agree with is that it is getting out of hand. In the last year tuition and fees have increased 8.3%, which more than doubled the rate of inflation. This increase was not a surprise. It followed the trend of increasing tuition costs that has been occurring for the last decade at an average rate of 5.6%. On top of the high costs, a college degree has become a necessity to obtain a decent career. The only solution for students has become borrowing. The federal government is lending over $100 billion dollars a year to students. Private loans on top of that have left many graduates unable to keep up.

Kevin Carey, a director of Education Sector, a think tank in Washington D.C, compares entering college to getting smuggled across the border. He says “you can get to the promised land if you try hard enough, but you arrive in a state of indentured servitude to the shady operators who overcharged you for the trip.” The image he portrays of the costs of higher education is dark and striking, but realistic. Carey acknowledges the hard work the government is putting in trying to mitigate costs, but doesn’t see it as progress when the tuition fees are still increasing astronomically.

The problem is obvious, but the solutions are vague. Carey sees the high costs as an “inevitable consequence of the way higher education system is currently design.” The system is broken and “static.” It is not changing and developing with the needs of the time. Most higher education institutions are founded in their old ways and traditions. They do not desire to change. Carey believes the government needs to threaten the institutions for reformation to ever occur. The institutions are benefiting themselves when they need to put students and public interest first.